UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549








FORM
      10-QSB







**þ**
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934




For
      the
      quarterly period ended March 31, 2007





** ̈**
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
                ACT





Commission
      File Number: 000-30556








**FLAGSHIP
      GLOBAL HEALTH, INC.**




(Exact
      Name of Small Business Issuer as Specified in Its Charter)







**Delaware**
              
              **11-3210792**(State
                  or Other Jurisdiction of
              
              (I.R.S.
                  EmployerIncorporation
                  or Organization)
              
              Identification
                  No.)




220
      West
      42 nd Street,
      23 rd Floor,
      New York, NY 10036


(Address
      of Principal Executive Offices)





(212)
      340-9100


(Issuer's
      Telephone Number, Including Area Code)





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days.       Yes þ  No  ̈





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of The Exchange Act)


Yes  ̈ No þ




APPLICABLE
      ONLY TO CORPORATE ISSUERS




State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date: 59,096,607  shares
      of
      common stock, $0.001 par value, outstanding as of May 1, 2007.




Transitional
      Small Business Disclosure Format (check one):     Yes  ̈ No þ









**PART
      I. FINANCIAL INFORMATION**




**Flagship
      Global Health, Inc.**


**(Formerly
      known as Patients & Physicians, Inc.)**


**(A
      Development Stage Company)**





**INDEX**


**Page****PART
                I. FINANCIAL INFORMATION****Item
                  1.**
              **Financial
                Statements**Condensed
                  Balance Sheets, as of March 31, 2007 (unaudited) and December 31,
                  2006
                  (audited)
              
              F-2Condensed
                  Statements of Operations, for the three months ended March 31,
                  2007 and
                  2006 and for the period from inception (July 9, 2002) to March
                  31, 2007
                  (unaudited)
              
              F-3Condensed
                  Statement of Stockholders’ Equity (Deficit), for the period from inception
                  (July 9, 2002) to March 31, 2007 (unaudited)
              
              F-4Condensed
                  Statements of Cash Flows, for the three months ended March 31,
                  2007 and
                  2006 and for the period from inception (July 9, 2002) to March
                  31, 2007
                  (unaudited)
              
              F-5Notes
                to Condensed Financial Statements (unaudited)
              
              F-6
                  - F-12**Item
                  2.**
              **Management’s
                  Discussion and Analysis or Plan of Operation.**
              
              2**Item
                  3.**
              **Controls
                  and Procedures.**
              
              12**PART
                  II. OTHER INFORMATION****Item
                  1.**
              **Legal
                  Proceedings.**
              
              14**Item
                  2.**
              **Unregistered
                  Sales of Equity Securities and Use of Proceeds.**
              
              14**Item
                  3.**
              **Defaults
                  Upon Senior Securities.**
              
              14**Item
                  4.**
              **Submission
                  of Matters to a Vote of Security Holders.**
              
              14**Item
                  5.**
              **Other
                  Information.**
              
              14**Item
                  6.**
              **Exhibits.**
              
              14




F-1


**Flagship
                Global Health, Inc.****(Formerly
                known as Patients & Physicians, Inc.)****(A
                Development Stage Company)****Condensed
                Balance Sheets****As
                of March 31, 2007 (unaudited) and December 31,
                2006**




March
                31,
              2007
            
            December
                31,
              2006(Unaudited)
            
            
            (Note
                2)**ASSETS****Current
                Assets:**Cash
                and cash equivalents
            
            $
            282,308
            
            $
            941,733Prepaid
                expenses and other current assets
            
            
            146,011
            
            
            162,959Total
                current assets
            
            
            428,319
            
            
            1,104,692Property
                and equipment, net
            
            
            418,968
            
            
            433,586Debt
                issuance costs, net
            
            
            81,175
            
            
            113,367Restricted
                cash
            
            
            824,117
            
            
            824,117Goodwill
            
            
            61,912
            
            
            61,912Intangible
                assets, net
            
            
            42,168
            
            
            44,917Other
                assets
            
            
            16,956
            
            
            1,265**Total
                assets**
            
            $
            1,873,615
            
            $
            2,583,856**LIABILITIES
                AND STOCKHOLDERS' DEFICIT****Current
                Liabilities:**Accounts
                payable
            
            $
            504,131
            
            $
            206,873Accrued
                liabilities
            
            
            408,336
            
            
            364,647Notes
                payable, current portion, net of unamortized discount
            
            
            6,623,370
            
            
            5,606,078Total
                current liabilities
            
            
            7,535,837
            
            
            6,177,598Notes
                payable, net of current portion and unamortized discount
            
            
            2,459,448
            
            
            2,676,795Deferred
                rent liability
            
            
            291,320
            
            
            272,716**Total
                liabilities**
            
            
            10,286,605
            
            
            9,127,109**COMMITMENTS
                AND CONTINGENCIES****Stockholders'
                Deficit:**Preferred
                stock, $.001 par value: 5,000,000 shares authorized, 0 shares issued
                and
                outstanding at March 31, 2007 and December 31, 2006
            
            
            -
            
            
            -Common
                stock, $0.001 par value: 125,000,000 shares authorized, 59,049,385
                and
                58,484,385 shares issued and outstanding at March 31, 2007 and December
                31, 2006, respectively
            
            
            59,049
            
            
            58,484Additional
                paid-in capital
            
            
            19,390,043
            
            
            18,004,468Deficit
                accumulated during the development stage
            
            
            (27,862,082
            )
            
            (24,606,205
            )Total
                stockholders' deficit
            
            
            (8,412,990
            )
            
            (6,543,253
            )**Total
                liabilities and stockholders' deficit**
            
            $
            1,873,615
            
            $
            2,583,856




See
                Notes to Condensed Financial
                Statements




F-2





**Flagship
                Global Health, Inc.****(Formerly
                known as Patients & Physicians, Inc.)****(A
                Development Stage Company)****Condensed
                Statements of Operations****For
                the three months ended March 31, 2007 and 2006**
              **and
                for the period from inception (July 9, 2002) to March 31, 2007
                (unaudited)**




Three
                Months Ended March 31,
            
            For
                the period from inception (July 9, 2002) to March 31,2007
            
            2006
            
            2007Subscription
                revenue
            
            $
            50,902
            
            $
            7,014
            
            $
            129,515Costs
                of revenue
            
            
            7,275
            
            
            2,199
            
            
            25,923Gross
                profit
            
            
            43,627
            
            
            4,815
            
            
            103,592Costs
                and expenses:Membership
                services
            
            
            674,818
            
            
            641,961
            
            
            5,495,547Selling,
                general and administrative
            
            
            1,631,558
            
            
            1,642,326
            
            
            17,272,310Loss
                on sale of equipment
            
            
            -
            
            
            -
            
            
            88,953Impairment
                of long-lived assets
            
            
            -
            
            
            -
            
            
            505,377Total
                costs and expenses
            
            
            2,306,376
            
            
            2,284,287
            
            
            23,362,187Loss
                from operations
            
            
            (2,262,749
            )
            
            (2,279,472
            )
            
            (23,258,595
            )Interest
                income
            
            
            8,836
            
            
            11,564
            
            
            88,302Amortization
                of debt discounts anddebt
                issuance costs
            
            
            (832,137
            )
            
            (664,914
            )
            
            (3,726,074
            )Interest
                expense
            
            
            (246,677
            )
            
            (97,428
            )
            
            (1,083,205
            )Other
                income and expenses, net
            
            
            76,850
            
            
            (5,224
            )
            
            117,490Loss
                before provision for income taxes
            
            
            (3,255,877
            )
            
            (3,035,474
            )
            
            (27,862,082
            )Provision
                for income taxes
            
            
            -
            
            
            -
            
            
            -Net
                loss
            
            
            (3,255,877
            )
            
            (3,035,474
            )
            $
            (27,862,082
            )Accretion
                of preferred stock
            
            
            -
            
            
            (6,833
            )Net
                loss attributable to common stockholders
            
            $
            (3,255,877
            )
            $
            (3,042,307
            )Weighted
                average number of shares outstanding, basic and diluted
            
            
            58,862,329
            
            
            39,794,122Net
                loss per share, basic and diluted
            
            $
            (0.06
            )
            $
            (0.08
            )




See
                Notes to Condensed Financial
                Statements




F-3





**Flagship
                Global Health, Inc.****(Formerly
                known as Patients & Physicians, Inc.)****(A
                Development Stage Company)****Condensed
                Statement of Stockholders' Equity (Deficit)****For
                the period from inception (July 9, 2002) to March 31, 2007
                (unaudited)**




DeficitAccumulated
              
              TotalAdditional
              
              During
                  the
              
              Stockholders'Common
                  Stock
              
              Paid-in
              
              Development
              
              EquityShares
              
              Amount
              
              Capital
              
              Stage
              
              (Deficit)**Balances
                  at July 9, 2002 (inception)**
              
              
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Issuance
                  of common stock to founders at $0.001 per share in August
                  2002
              
              
              16,000,000
              
              
              16,000
              
              
              -
              
              
              -
              
              
              16,000Sale
                  of common stock at $0.044 per share in August 2002
              
              
              2,857,150
              
              
              2,857
              
              
              122,143
              
              
              -
              
              
              125,000Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (107,271
              )
              
              (107,271
              )**Balances
                  at December 31, 2002**
              
              
              18,857,150
              
              
              18,857
              
              
              122,143
              
              
              (107,271
              )
              
              33,729Issuance
                  of common stock in exchange for goods and services at $0.056 per
                  share in
                  August 2003
              
              
              13,678,910
              
              
              13,679
              
              
              746,321
              
              
              -
              
              
              760,000Issuance
                  of common stock to employees at $0.056 per share in August
                  2003
              
              
              1,510,000
              
              
              1,510
              
              
              82,386
              
              
              -
              
              
              83,896Cancellation
                  of founders' shares at $0.001 per share in August 2003
              
              
              (3,510,000
              )
              
              (3,510
              )
              
              3,510
              
              
              -
              
              
              -Issuance
                  of options to purchase common stock to employees for
                  services
              
              
              -
              
              
              -
              
              
              37,243
              
              
              -
              
              
              37,243Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (495,895
              )
              
              (495,895
              )**Balances
                  at December 31, 2003**
              
              
              30,536,060
              
              
              30,536
              
              
              991,603
              
              
              (603,166
              )
              
              418,973Exercise
                  of stock options at $0.035 per share in August 2004
              
              
              1,000,000
              
              
              1,000
              
              
              34,000
              
              
              -
              
              
              35,000Value
                  of warrants issued in connection with the sale of Redeemable Series
                  A
                  Convertible Preferred Stock
              
              
              -
              
              
              -
              
              
              143,066
              
              
              -
              
              
              143,066Accretion
                  of Redeemable Series A Convertible Preferred Stock
              
              
              -
              
              
              -
              
              
              (16,223
              )
              
              -
              
              
              (16,223
              )Issuance
                  of options to purchase common stock to employees for
                  services
              
              
              -
              
              
              -
              
              
              95,162
              
              
              -
              
              
              95,162Issuance
                  of options to purchase common stock to non-employees for
                  services
              
              
              -
              
              
              -
              
              
              275,951
              
              
              -
              
              
              275,951Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (3,248,897
              )
              
              (3,248,897
              )**Balances
                  at December 31, 2004**
              
              
              31,536,060
              
              
              31,536
              
              
              1,523,559
              
              
              (3,852,063
              )
              
              (2,296,968
              )Exercise
                  of stock options at $0.20 per share in September 2005
              
              
              250
              
              
              -
              
              
              50
              
              
              -
              
              
              50Accretion
                  of Redeemable Series A Convertible Preferred Stock
              
              
              -
              
              
              -
              
              
              (19,473
              )
              
              -
              
              
              (19,473
              )Accretion
                  of Redeemable Series B Convertible Preferred Stock
              
              
              -
              
              
              -
              
              
              (4,255
              )
              
              -
              
              
              (4,255
              )Stock
                  issued in lieu of compensation at $0.525 per share in March
                  2005
              
              
              3,031,250
              
              
              3,031
              
              
              1,588,375
              
              
              -
              
              
              1,591,406Issuance
                  of options to purchase common stock to employees for
                  services
              
              
              -
              
              
              -
              
              
              243,470
              
              
              -
              
              
              243,470Issuance
                  of options to purchase common stock to non-employees for
                  services
              
              
              -
              
              
              -
              
              
              321,179
              
              
              -
              
              
              321,179Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (7,599,177
              )
              
              (7,599,177
              )**Balances
                  at December 31, 2005**
              
              
              34,567,560
              
              
              34,567
              
              
              3,652,905
              
              
              (11,451,240
              )
              
              (7,763,768
              )Allocation
                  of value to common stock, issued in connection with convertible
                  debt
                  financing
              
              
              7,968,950
              
              
              7,969
              
              
              3,127,729
              
              
              -
              
              
              3,135,698Allocation
                  of value to warrants issuedin
                  connection with convertible debt financing
              
              
              -
              
              
              -
              
              
              457,671
              
              
              -
              
              
              457,671Allocation
                  of value to beneficial conversion feature in connection with convertible
                  debt financing
              
              
              -
              
              
              -
              
              
              1,695,111
              
              
              -
              
              
              1,695,111Conversion
                  of Redeemable Series A Preferred Stock in connection with
                  acquisition
              
              
              7,755,481
              
              
              7,755
              
              
              2,117,244
              
              
              -
              
              
              2,124,999Conversion
                  of Redeemable Series B Preferred Stock in connection with
                  acquisition
              
              
              5,205,764
              
              
              5,206
              
              
              3,379,400
              
              
              -
              
              
              3,384,606Issuance
                  of shares in connection with acquisition
              
              
              174,130
              
              
              174
              
              
              (250
              )
              
              -
              
              
              (76
              )Exercise
                  of vested options at $0.89 per share in January 2006
              
              
              2,500
              
              
              2
              
              
              2,223
              
              
              -
              
              
              2,225Exercise
                  of vested options at $0.10 per share in May 2006
              
              
              75,000
              
              
              75
              
              
              7,425
              
              
              -
              
              
              7,500Exercise
                  of vested options at $0.20 per share in May 2006
              
              
              12,500
              
              
              13
              
              
              2,487
              
              
              -
              
              
              2,500Exercise
                  of vested options at $0.10 per share in June 2006
              
              
              110,000
              
              
              110
              
              
              10,890
              
              
              -
              
              
              11,000Exercise
                  of vested options at $0.20 per share in June 2006
              
              
              12,500
              
              
              13
              
              
              2,487
              
              
              -
              
              
              2,500Accretion
                  of Redeemable Series A Convertible Preferred Stock
              
              
              -
              
              
              -
              
              
              (160,241
              )
              
              -
              
              
              (160,241
              )Accretion
                  of Redeemable Series B Convertible Preferred Stock
              
              
              -
              
              
              -
              
              
              (33,617
              )
              
              -
              
              
              (33,617
              )Issuance
                  of shares in connection with the share exchange
              
              
              1,200,000
              
              
              1,200
              
              
              (1,200
              )
              
              -
              
              
              -Issuance
                  of shares in connection with acquisition of assets
              
              
              300,000
              
              
              300
              
              
              185,700
              
              
              -
              
              
              186,000Issuance
                  of options to purchase common stock to employees for
                  services
              
              
              -
              
              
              -
              
              
              1,075,008
              
              
              -
              
              
              1,075,008Issuance
                  of options to purchase common stock to non-employees for
                  services
              
              
              -
              
              
              -
              
              
              284,596
              
              
              -
              
              
              284,596Issuance
                  of common stock and warrants at $2.00 per unit in December
                  2006
              
              
              1,100,000
              
              
              1,100
              
              
              2,198,900
              
              
              -
              
              
              2,200,000Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (13,154,965
              )
              
              (13,154,965
              )**Balances
                  at December 31, 2006**
              
              
              58,484,385
              
              
              58,484
              
              
              18,004,468
              
              
              (24,606,205
              )
              
              (6,543,253
              )Issuance
                  of common stock and warrants at $2.00 per unit in January
                  2007
              
              
              565,000
              
              
              565
              
              
              1,129,435
              
              
              -
              
              
              1,130,000Issuance
                  of options to purchase common stock to employees for
                  services
              
              
              -
              
              
              -
              
              
              80,767
              
              
              -
              
              
              80,767Issuance
                  of options to purchase common stock to non-employees for
                  services
              
              
              -
              
              
              -
              
              
              175,373
              
              
              -
              
              
              175,373Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (3,255,877
              )
              
              (3,255,877
              )**Balances
                  at March 31, 2007 (unaudited)**
              
              
              59,049,385
              
              $
              59,049
              
              $
              19,390,043
              
              $
              (27,862,082
              )
              $
              (8,412,990
              )
  See
                  Notes to Condensed Financial
                  Statements




F-4





**Flagship
                Global Health, Inc.****(Formerly
                known as Patients & Physicians, Inc.)****(A
                Development Stage Company)****Condensed
                Statements of Cash Flows****For
                the three months ended March 31, 2007 and 2006**
              **and
                for the period from inception (July 9, 2002) to March 31, 2007
                (unaudited)**




Three
                Months Ended March 31,
            
            For
                the period from inception (July 9, 2002) to March 31, 20072007
            
            2006**OPERATING
                ACTIVITIES**Net
                loss
            
            $
            (3,255,877
            )
            $
            (3,035,474
            )
            $
            (27,862,082
            )Adjustments
                to reconcile net loss to net cash used in operating activities:Share-based
                compensation expense
            
            
            256,140
            
            
            600,578
            
            
            2,588,749Amortization
                of debt discounts and debt issuance costs
            
            
            832,137
            
            
            664,914
            
            
            3,726,074Depreciation
                and amortization expense
            
            
            50,226
            
            
            51,122
            
            
            577,575Deferred
                rent liability
            
            
            18,604
            
            
            -
            
            
            291,320Loss
                on sale of equipment
            
            
            -
            
            
            -
            
            
            88,953Common
                stock issued in exchange for services
            
            
            -
            
            
            -
            
            
            251,683Preferred
                stock issued in exchange for services
            
            
            -
            
            
            -
            
            
            85,000Common
                stock issued to employees
            
            
            -
            
            
            -
            
            
            83,896Common
                stock issued to founders
            
            
            -
            
            
            -
            
            
            16,000Common
                stock issued to employees in lieu of compensation
            
            
            -
            
            
            -
            
            
            1,591,406Note
                payable in lieu of compensation
            
            
            -
            
            
            -
            
            
            165,000Impairment
                of long-lived assets
            
            
            -
            
            
            -
            
            
            505,377Changes
                in operating assets and liabilities:Prepaid
                expenses and other current assets
            
            
            16,948
            
            
            60,226
            
            
            (146,011
            )Other
                non current assets
            
            
            (15,691
            )
            
            -
            
            
            (16,956
            )Restricted
                cash
            
            
            -
            
            
            -
            
            
            (824,117
            )Accounts
                payable and accrued liabilities
            
            
            340,947
            
            
            (409,008
            )
            
            912,467Net
                cash used in operating activities
            
            
            (1,756,566
            )
            
            (2,067,642
            )
            
            (17,965,666
            )**INVESTING
                ACTIVITIES**Purchases
                of property and equipment
            
            
            (32,859
            )
            
            (28,742
            )
            
            (1,109,398
            )Proceeds
                from the sale of equipment
            
            
            -
            
            
            -
            
            
            25,000Net
                cash used in investing activities
            
            
            (32,859
            )
            
            (28,742
            )
            
            (1,084,398
            )**FINANCING
                ACTIVITIES**Proceeds
                from (payments to) stockholders
            
            
            -
            
            
            (18,130
            )
            
            83,763Proceeds
                from issuance of common stock and warrants
            
            
            1,130,000
            
            
            -
            
            
            3,462,969Proceeds
                from exercise of stock options
            
            
            -
            
            
            2,226
            
            
            60,775Proceeds
                from issuance of Redeemable Series A Convertible
              Preferred
                Stock
            
            
            -
            
            
            -
            
            
            1,735,000Costs
                associated with issuance of Redeemable Series A Convertible
              Preferred
                Stock
            
            
            -
            
            
            -
            
            
            (52,871
            )Proceeds
                from exercise of warrants to purchase Redeemable Series A
              Convertible
                Preferred Stock
            
            
            -
            
            
            137,120
            
            
            305,000Proceeds
                from issuance of Redeemable Series B Convertible
              Preferred
                Stock
            
            
            -
            
            
            -
            
            
            3,383,748Costs
                associated with issuance of Redeemable Series B Convertible
              Preferred
                Stock
            
            
            -
            
            
            -
            
            
            (37,015
            )Proceeds
                from issuance of notes payable
            
            
            -
            
            
            -
            
            
            6,935,000Deferred
                transaction costs related to recapitalization
            
            
            -
            
            
            (240,000
            )
            
            -Issuance
                of shares in connection with acquisition
            
            
            -
            
            
            -
            
            
            (76
            )Bank
                overdraft, net
            
            
            -
            
            
            (62,269
            )
            
            -Debt
                issuance costs
            
            
            -
            
            
            (156,164
            )
            
            (225,321
            )Repayments
                of notes payable
            
            
            -
            
            
            (240,000
            )
            
            (500,000
            )Proceeds
                from issuance of convertible term notes, net
            
            
            -
            
            
            4,181,400
            
            
            4,181,400**Net
                cash provided by financing activities**
            
            
            1,130,000
            
            
            3,604,183
            
            
            19,332,372**Net
                increase (decrease) in cash**
            
            
            (659,425
            )
            
            1,507,799
            
            
            282,308**Cash
                at beginning of period**
            
            
            941,733
            
            
            138,344
            
            
            -**Cash
                at end of period**
            
            $
            282,308
            
            $
            1,646,143
            
            $
            282,308**Supplemental
                cash flow information**Cash
                payments for interest
            
            $
            163,468
            
            $
            -
            
            $
            756,867




See
                Notes to Condensed Financial
                Statements




F-5


**Flagship
        Global Health, Inc.**
 **(Formerly
        known as Patients & Physicians, Inc.)**
 **(A
        Development Stage Company)**
 **Notes
        to Condensed Financial Statements (unaudited)**


**1.**
            **Nature
                of Business and Basis of
                Presentation**





Flagship
      Global Health, Inc. (“Flagship”) was organized on February 5, 1993, and was formerly
      known as Patients & Physicians, Inc., which commenced operations on July 9,
      2002.





All
      refererences to “Company”, “our”, “us” or “we” shall apply to Flagship Global
      Health, Inc.





On
      June
      27, 2006, Flagship closed an Exchange Agreement (the "Share Exchange") with
      all
      of the stockholders of Flagship Patient Advocates, Inc. (“Advocates”) whereby
      Flagship acquired all of the issued and outstanding capital stock of Advocates.
      Upon completion of the Share Exchange, Advocates’ stockholders controlled
      approximately 99% of the then issued and outstanding common stock. Prior to
      the
      Share Exchange, Flagship was a shell company. Post the Share Exchange, Advocates
      business activities were the activities of Flagship. As a result of these
      factors, this transaction has been treated as a reverse merger and a capital
      transaction, equivalent to the issuance of stock by Advocates for Flagship’s net
      assets and, accordingly, the historical financial statements prior to June
      27,
      2006 are those of Advocates. All shares and per share data prior to the Share
      Exchange have been restated to reflect the stock issuances and the effect of
      the
      closing of the Share Exchange.





On
      January 12, 2007, a Certificate of Ownership and Merger was filed with the
      Secretary of State of the State of Delaware, pursuant to which Flagship merged
      with its wholly owned subsidiary, Advocates. As a result of the merger, Flagship
      assumed all the obligations of Advocates and the operations of Advocates were
      dissolved. As the surviving entity, Patients & Physicians, Inc. changed its
      name to Flagship Global Health, Inc. on January 12, 2007.





To
      date,
      Flagship has been focused on developing a membership-based specialty healthcare
      advocacy company that provides physician referrals on a priority basis, emergent
      care needs, a personal electronic internet-based medical record repository
      and
      air evacuation to its members, all linked by a sophisticated IT management
      system.





Flagship
      has not generated significant revenues through March 31, 2007, and is considered
      to be a development stage company in accordance with Statement of Financial
      Accounting Standards (“SFAS”) No. 7, Accounting and Reporting by Development
      Stage Enterprises.





The
      accompanying unaudited condensed financial statements have been prepared
      assuming the Company will continue as a going concern. We have experienced
      net
      losses of $27,862,082 since inception (July 9, 2002), including $3,255,877
      and
      $3,035,474 for the three months ended March 31, 2007 and 2006, respectively.
      In
      addition, we had a working capital deficit of $7,107,518 at March 31, 2007.
      These factors, among others, raise substantial doubt about our ability to
      continue as a going concern. Our unaudited condensed financial statements do
      not
      include any adjustments that might result from the outcome of this uncertainty.
      Assurances cannot be given that adequate financing can be obtained to meet
      our
      capital needs. Our continuation as a going concern is dependent upon our ability
      to generate sufficient cash flow to meet obligations on a timely basis, to
      obtain additional financing and, ultimately, to attain profitability. Should
      any
      of these events not occur, we will be adversely affected and may have to cease
      operations.




F-6


**Flagship
        Global Health, Inc.**
 **(Formerly
        known as Patients & Physicians, Inc.)**
 **(A
        Development Stage Company)**
 **Notes
        to Condensed Financial Statements (unaudited)**


**2.**
            **Summary
                of Significant Accounting
                Policies**





**Interim
      financial statements**





The
      accompanying unaudited condensed financial statements have been prepared
      pursuant to the rules and regulations of the Securities and Exchange Commission
      ("SEC"). Certain information and footnote disclosures normally included in
      financial statements prepared in accordance with accounting principles generally
      accepted in the United States of America have been omitted pursuant to such
      rules and regulations. However the Company believes that the disclosures are
      adequate to make the information presented not misleading. The unaudited
      condensed financial statements reflect all adjustments (consisting only of
      normal recurring adjustments) that are, in the opinion of management, necessary
      for a fair presentation of the Company's financial position and results of
      operations. The operating results for the three months ended March 31, 2007
      and
      2006 are not necessarily indicative of the results to be expected for any other
      interim period of any future year. The accompanying unaudited condensed
      financial statements have been derived from and should be read in conjunction
      with the Company's audited financial statements for the year ended December
      31,
      2006 included in our 10-KSB form filed with the SEC on April 2,
      2007.




**Use
      of Estimates**





The
      preparation of the Company’s condensed financial statements in conformity with
      accounting principles generally accepted in the United States of America
      (“GAAP”) requires management to make estimates and assumptions that affect the
      reported amounts of assets and liabilities and disclosure of contingent assets
      and liabilities at the date of the financial statements and the reported amounts
      of revenues, if any, and expenses during the reporting period. The accounting
      estimates that require management’s most difficult and subjective judgments
      include capitalization of certain assets, depreciable/amortizable lives,
      impairment of long-lived assets, and the fair value of common stock and options
      issued for services as well as the allocation of proceeds from the issuance
      of
      debt and equity instruments. Because of the uncertainty inherent in such
      estimates, actual results may differ from these estimates.




**Reclassifications**




Certain
      reclassifications have been made in the prior period condensed financial
      statements to conform to the current period presentation.




**Net
      loss per share**





Net
      loss
      per share is computed based on the weighted average number of shares of common
      stock outstanding during the year.





Basic
      loss per share is computed by dividing loss available to common stockholders
      by
      the weighted average common shares outstanding for the period. Diluted earnings
      per share reflects the potential dilution that could occur if securities or
      other contracts to issue common stock were exercised or converted into common
      stock or resulted in the issuance of common stock that then shared in the
      earnings of the entity. Since the effect of outstanding warrants, options and
      debt conversion features is antidilutive, due to the losses of the Company,
      they
      have been excluded from the Company’s computation of net loss per share for the
      three months ended March 31, 2007 and 2006, respectively. Therefore, basic
      and
      diluted loss per share were the same for three months ended March 31, 2007
      and
      2006. The total number of potentially dilutive securities excluded from the
      calculation of diluted loss per share for the three months ended March 31,
      2007
      and 2006 was 17,834,313 and 17,707,830, respectively.




F-7




**Flagship
        Global Health, Inc.**
 **(Formerly
        known as Patients & Physicians, Inc.)**
 **(A
        Development Stage Company)**
 **Notes
        to Condensed Financial Statements (unaudited)**


**Revenue
      Recognition**





The
      Company recognizes revenues in accordance with SEC Staff Accounting Bulletin
      No.
      101, *Revenue
      Recognition in Financial Statements* (“SAB
      No. 101”) as amended by SEC Staff Accounting Bulletin No. 104, *Revenue
      Recognition* ,
      revised
      and updated (“SAB No. 104”), which stipulates that revenue generally is realized
      or realizable and earned, once persuasive evidence of an arrangement exists,
      delivery has occurred or services have been rendered, the fee is fixed or
      determinable and collectibility is reasonably assured. The Company sells
      memberships to individuals and institutions for access to its healthcare service
      offerings. The Company recognizes revenue ratably, over the life of the
      membership. The Company recognized $50,902 and $7,014 of revenue for the three
      months ended March 31, 2007 and 2006, respectively.




**Stock-Based
      Compensation**





The
      Company accounts for share-based compensation to employees and directors in
      accordance with SFAS No. 123(R), *Share-Based
      Payment* (“SFAS
      No. 123(R)”), which requires the recognition of compensation expense for
      employee stock options and other share-based payments. Under SFAS No. 123(R),
      expense related to employee stock options and other share-based payments is
      recognized over the relevant service period based on the fair value of each
      stock option grant.





The
      Company has accounted for non-employee compensation expense in accordance with
      Emerging Issues Task Force (“EITF”) Issue No. 96-18, *Accounting
      for Equity Instruments That Are Issued to Other Than Employees for Acquiring,
      or
      in Conjunction with Selling, Goods or Services* (“EITF
      96-18”), which requires non-employee stock options to be measured at their fair
      value as of the earlier of the date at which a commitment for performance to
      earn the equity instruments is reached (“performance commitment date”) or the
      date at which performance is complete (“performance completion date”).
      Non-employee stock options which involve only performance conditions when
      neither the performance commitment date nor performance completion date has
      occurred as of the interim financial reporting date are accounted for by
      measuring the instrument’s then-current fair value. As of March 31, 2007, the
      Company accounted for 1,910,000 options under the guidance of EITF
      96-18.




The
      Company has followed the guidance outlined in FASB Interpretations (“FIN”) No.
      28, *Accounting
      for Stock Appreciation Rights and Other Variable Stock Option or Award
      Plans* (“FIN
      28”) as it relates to computing expense when appreciation rights vest over
      time.





**Income
      Taxes**





In
      July
      2006, the Financial Accounting Standards Board ("FASB") issued Interpretation
      No. 48 ("FIN 48"), *Accounting
      for Uncertainty in Income Taxes, an Interpretation of FASB Statement No.
      109* . 
      FIN 48 clarifies the accounting for uncertainty in income taxes recognized
      in a
      company's financial statements and prescribes a recognition threshold and
      measurement attribute for the financial statement recognition and measurement
      of
      a tax position taken or expected to be taken in an income tax return.  FIN
      48 also provides guidance in derecognition, classification, interest and
      penalties, accounting in interim periods, disclosures and transition.  FIN
      48 is effective for fiscal years beginning after December 15, 2006. The
      adoption of FIN 48 did not have a significant effect on the Company’s unaudited
      condensed financial statements.




F-8




**Flagship
        Global Health, Inc.**
 **(Formerly
        known as Patients & Physicians, Inc.)**
 **(A
        Development Stage Company)**
 **Notes
        to Condensed Financial Statements (unaudited)**


**Registration
      Payment Arrangements**





The
      Company  accounts
      for registrations rights in accordance with FASB Staff Position  EITF
      00-19-2, ** *Accounting
      for Registration Payment Arrangements*  (“EITF-00-19-2”).
      The Company  examines
      the probability that the registration  of  all
      shares of common stock in connection with future possible exercises of
      outstanding warrants to remain effective.  The
      Company expects the registration  such
      shares to remain effective and therefore no contingent liability has been
      recorded as of March 31, 2007.




**Recent
      Accounting Pronouncements Issued, Not Yet Adopted**





In
      September 2006, the FASB issued FASB Statement No. 157, *Fair
      Value Measurements* (“SFAS
      No. 157”), which defines fair value, establishes a framework for measuring fair
      value under GAAP, and expands disclosures about fair value measurements. SFAS
      No. 157 applies to other accounting pronouncements that require or permit fair
      value measurements. The new guidance is effective for financial statements
      issued for fiscal years beginning after November 15, 2007, and for interim
      periods within those fiscal years. The Company will evaluate the potential
      impact, if any, of the adoption of SFAS No. 157 on its financial position,
      results of operations and cash flows.





In
      February 2007, FASB issued Statement No. 159, *The
      Fair Value Option for Financial Assets and Financial
      Liabilities* (“SFAS
      No. 159”). SFAS No. 159 provides a “Fair Value Option” under which a company may
      irrevocably elect fair value as the initial and subsequent measurement attribute
      for certain financial assets and liabilities. SFAS No. 159 will be available
      on
      a contract-by-contract basis with changes in fair value recognized in earnings
      as those changes occur. SFAS No. 159 is effective for fiscal years after
      November 15, 2007. SFAS No. 159 also allows early adoption provided that the
      entity also adopts the requirements of SFAS No. 157. The Company does not
      believe the adoption of SFAS No. 159 will have a material impact, if any, on
      its
      financial statements.





Management
      does not believe that any other recently issued, but not yet effected,
      accounting standards if currently adopted would have a material effect on the
      Company’s financial statements.





**3.**
            **Stock-Based
                Compensation**





The
      Company issues stock-based compensation to its officers, directors, employees
      and consultants under its 2004 Stock Option and Grant Plan (the “Stock Option
      Plan”). There are 9,000,000 shares authorized under the Stock Option Plan. The
      maximum life of options granted is generally 10 years and the options generally
      vest over a period of four years. The Board of Directors of the Company may
      approve other vesting schedules. Vested options may be exercised in whole or
      in
      part. The exercise price is determined by the Board of Directors considering
      factors such as recent sales of stock, results of operations and the state
      of
      the Company’s business and industry.





A
      summary
      of stock-based compensation expense recognized during the three months ended
      March 31, 2007 and 2006 is presented below:





Three
                Months Ended March 31,2007
            
            2006Membership
                Services
            
            $
            17,824
            
            $
            45,520Selling,
                General and Administratrive
            
            
            62,943
            
            
            535,813Non-Employees
            
            
            175,373
            
            
            19,245Total
                Options Expense
            
            $
            256,140
            
            $
            600,578




A
      summary
      of options activity for the three months ended March 31, 2007 is presented
      below:





Options
            
            Weighted
                Average Exercise PriceOutstanding,
                December 31, 2006
            
            
            7,213,250
            
            $
            0.14Granted
            
            
            10,000
            
            
            2.00Exercised
            
            
            -
            
            
            -Forfeited
                or expired
            
            
            (12,500
            )
            
            0.18Outstanding,
                March 31, 2007
            
            
            7,210,750
            
            $
            0.72Exercisable,
                March 31, 2007
            
            
            3,675,250
            
            $
            0.74




The
      fair
      value of each stock option grant is estimated on the date of grant. A
      Black-Scholes option-pricing model, applying the following range of assumptions,
      was used to estimate the fair value for stock options issued:





Three
                Months Ended March 31,2007
            
            2006Expected
                Volatility
            
            
            82
            %
            
            68.83
            %Risk-free
                rate
            
            
            4.58%
                - 4.65
            %
            
            4.58%
                - 4.83
            %Expected
                life of options
            
            
            5
                - 10 years
            
            
            10
                years




Due
      to
      the Company’s limited history as a public company, the Company has estimated
      expected volatility based on the historical volatility of certain companies
      as
      determined by management. The risk-free interest rate assumption is based upon
      observed interest rates appropriate for the expected term of the Company’s
      employee stock options. The dividend yield assumption is based on the Company’s
      intent not to issue a dividend under its dividend policy. The expected term
      for
      stock options granted to employees is based on the simplified method in
      accordance with Staff Accounting Bulletin No. 107 on Share Based
      Payment.




F-9


**Flagship
          Global Health, Inc.**
 **(Formerly
          known as Patients & Physicians, Inc.)**
 **(A
          Development Stage Company)**
 **Notes
          to Condensed Financial Statements (unaudited)**


The
      weighted average grant-date fair value of the options granted was $1.50 per
      share and $0.47 per share for the three months ended March 31, 2007 and 2006,
      respectively.




The
      options outstanding at March 31, 2007 have a weighted average remaining
      contractual life of approximately 8.1 years and an intrinsic value of
      $8,399,850.




The
      options which are exercisable at March 31, 2007 have a weighted average
      remaining contractual life of approximately 8.1 years, and an intrinsic value
      of
      $3,104,100.




As
      of
      March 31, 2007, there was $1,048,960 of total deferred compensation cost related
      to options issued to employees that will be recognized in expense over a
      weighted average period of 1.57 years.




**4.**
            **Debt**





Debt
      financings consist of the following as of March 31, 2007:





Principal
            
            Unamortized
                Debt
              Discount
            
            NetLaurus
                Convertible Notes
            
            $
            4,100,000
            
            $
            (1,167,075
            )
            $
            2,932,925Junior
                Notes
            
            
            3,000,000
            
            
            (850,107
            )
            
            2,149,893Apollo
                Medical Partners, LP
            
            
            2,700,000
            
            
            -
            
            
            2,700,000Apollo
                Medical Offshore Partners, LP
            
            
            1,300,000
            
            
            -
            
            
            1,300,000$
            11,100,000
            
            $
            (2,017,182
            )
            
            9,082,818Less
                current portion
            
            
            
            
            
            
            
            
            6,623,370Long
                term portion
            
            
            
            
            
            
            
            $
            2,459,448




*Debt
      Discount and Debt issuance costs*




During
      the three months ended March 31, 2007, and 2006, $799,945 and $654,055,
      respectively, of the discount on the Laurus Convertible Notes and the Junior
      Notes (the “Notes”) was amortized and included in amortization of debt discounts
      and debt issuance costs on the accompanying condensed statements of operations.
      During the three months ended March 31, 2007, and 2006, $32,192 and $10,859,
      respectively, of debt issuance costs have been amortized and included in
      amortization of debt discounts and debt issuance costs on the accompanying
      condensed statements of operations.




*Repayment
      Terms of Convertible Notes*





Flagship
      was originally required to repay the Notes on a monthly basis over the following
      24 months beginning on February 1, 2007. The holders of the Notes and the
      Company executed a waiver and amendment (the “Amendment”) in February 2007
      whereby the parties agreed that the first monthly payment would be deferred
      until April 1, 2007 and the two payments due in February and March 2007 would
      be
      payable in January 2009. The Company has determined that the change in the
      repayment of the debt per the Amendment did not substantially change the
      Notes.




F-10


**Flagship
          Global Health, Inc.**
 **(Formerly
          known as Patients & Physicians, Inc.)**
 **(A
          Development Stage Company)**
 **Notes
          to Condensed Financial Statements (unaudited)**


**5.**
            **Commitments
                and contingencies**





*Pending
      litigation*





A
      former
      independent contractor (the “Plaintiff”) has filed a lawsuit against the Company
      and Flagship, among others. The Plaintiff alleges that he was promised
      employment with the Company and performed services to Flagship based on these
      promises. The Plaintiff is seeking compensatory and punitive damages, including
      the issuance of additional shares of stock for these services and attorney
      fees
      in an aggregate amount of approximately $1,800,000. The Company believes this
      lawsuit is without merit and intends to defend it vigorously. In management’s
      opinion the final resolution of this matter will not have material impact on
      the
      financial position or results of operations of the Company.





**6.**
            **Warrants**





Outstanding
      warrants issued in connection with financings consist of the following at March
      31, 2007:





Warrants
            
            Exercise
                Price
            
            ExpirationLaurus
                warrants to purchase common stock
            
            
            621,118
            
            $
            0.92
            
            
            1/31/2013Guarantor
                warrants to purchase common stock
            
            
            465,839
            
            $
            0.92
            
            
            1/31/2013Junior
                Note Holder warrants to purchase common stock
            
            
            815,217
            
            $
            0.92
            
            
            1/31/2013Warrants
                issued in connection with the sale of stock
            
            
            832,500
            
            $
            1.00
            
            
            Various2,734,674




**7.**
            **Capital
                Stock**





In
      January 2007, the Company sold 565,000 shares of its common stock and issued
      282,500 warrants to purchase common stock at $2.00 per unit for an aggregate
      of
      $1,130,000. The warrants have a term of seven years and an exercise price of
      $1.00 per share.





**8.**  **Supplemental
      disclosure of non-cash investing and financing
      activities.**




Three
                Months Ended March 31,
            
            For
                the period from inception (July 9, 2002) to March 31, 20072007
            
            2006Value
                of contributions in-kind relating to Redeemable Series A Convertible
                Preferred Stock issued
            
            $
            -
            
            $
            -
            
            $
            85,000Value
                of contributions in-kind relating to common stock issuec
            
            $
            -
            
            $
            -
            
            $
            760,000Value
                of warrants issued in connection with Redeemable Series A Convertible
                Preferred Stock
            
            $
            -
            
            $
            -
            
            $
            143,066Common
                Stock issued to founders
            
            $
            -
            
            $
            -
            
            $
            16,000Accretion
                of Redeemable Series A Convertible Preferred Stock
            
            $
            -
            
            $
            4,838
            
            $
            195,937Accretion
                of Redeemable Series B Convertible Preferred Stock
            
            $
            -
            
            $
            1,995
            
            $
            37,872Common
                stock issued in lieu of compensation
            
            $
            -
            
            $
            -
            
            $
            1,591,406Conversion
                of Redeemable Series A Convertible Preferred Stock and Redeemable
                Series B
                Convertible Preferred Stock to common stock
            
            $
            -
            
            $
            -
            
            $
            5,509,605Issuance
                of shares in connection with acquisition
            
            $
            -
            
            $
            -
            
            $
            (76
            )Issuance
                of common stock in connection with financing
            
            $
            -
            
            $
            -
            
            $
            1,951Issuance
                of shares in connection with the share exchange
            
            $
            -
            
            $
            -
            
            $
            1,200Cancellation
                of founder’s shares
            
            $
            -
            
            $
            -
            
            $
            3,510Allocation
                of value to common stock, issued in connection with the PEMMS
                Agreement
            
            $
            -
            
            $
            -
            
            $
            186,000Allocation
                of value to common stock, issued in connection with convertible debt
                financing
            
            $
            -
            
            $
            3,223,389
            
            $
            3,135,698Allocation
                of warrants issued in connection with convertible debt
                financings
            
            $
            -
            
            $
            -
            
            $
            457,671Allocation
                of value to beneficial conversion feature in connection with convertible
                debt financings
            
            $
            -
            
            $
            1,695,111
            
            $
            1,695,111Conversion
                of short term notes in Junior convertible notes
            
            $
            -
            
            $
            3,000,000
            
            $
            3,000,000





F-11


**Flagship
          Global Health, Inc.**
 **(Formerly
          known as Patients & Physicians, Inc.)**
 **(A
          Development Stage Company)**
 **Notes
          to Condensed Financial Statements (unaudited)**


**9.**
            **Subsequent
                Events**





*Convertible
      Notes*




The
      Company issued $1,450,000 of 9% Convertible Notes in the second quarter of
      2007
      (the “Bridge Notes”). Total unpaid principal, together with all accrued interest
      shall be due one year from the issuance date. The Bridge Note holders also
      received 725,000 warrants to purchase shares of the Company’s common stock at an
      exercise price equal to $2.00 per share and a five year term. In the event
      the
      Company completes the closing of a financing at any time prior to the maturity
      of the Bridge Notes, the Bridge Note holders may, at their sole option, convert
      the remaining outstanding principal and accrued interest, into the form of
      securities issued in such next round of financing on the same terms and
      conditions and the same price per share of the securities issued in such
      financing.




F-12




**Item
      2. Management's Discussion and Analysis or Plan of
      Operation.**





This
      Management's **** Discussion
      and Analysis or Plan of Operation (MD&A) contains forward-looking statements
      that involve known and unknown risks, significant uncertainties and other
      factors that may cause our actual results, levels of activity, performance
      or
      achievements to be materially different from any future results, levels of
      activity, performance or achievements expressed, or implied, by those
      forward-looking statements. You can identify forward-looking statements by
      the
      use of the words “may,” “will,” “should,” “could,” “expects,” “plans,”
“anticipates,” “believes,” “estimates,” “predicts,” “intends,” “potential,”
“proposed,” or “continue” or the negative of those terms. These statements are
      only predictions. In evaluating these statements, you should specifically
      consider various factors, including the risk factors outlined above and below.
      These factors may cause our actual results to differ materially from any
      forward-looking statements. Although we believe that the exceptions reflected
      in
      the forward-looking statements are reasonable, we cannot guarantee future
      results, levels of activity, performance or achievements. Therefore, actual
      results may differ materially and adversely from those expressed in any
      forward-looking statements. We undertake no obligation to revise or update
      publicly any forward-looking statements for any reason.




**Risk
      Factors**





*Our
      financial condition, business, operation and prospects involve a high degree
      of
      risk. You should carefully read and consider the risks and uncertainties
      described below as well as the other information in this report before deciding
      to invest in our Company. If any of the following risks are realized, our
      business, operating results and financial condition could be harmed and the
      value of our stock could go down. This means that our stockholders could lose
      all or a part of their investment.*




**Risks
      Relating To Our Business**




***The
      Company’s business is difficult to evaluate because it has a limited operating
      history.***




The
      Company has a limited operating history and participates in a relatively new
      and
      rapidly evolving market. The business has undergone significant transformation
      during its short history as a result of changes in the services and products
      offered, changes in market conditions, and changes in our targeted membership,
      and is expected to continue to change for similar reasons. We cannot assure
      you
      that our current business strategy will be successful in the long
      term.




Many
      companies with business plans based on providing similar healthcare products
      and
      services have failed to be successful. We have experienced significant losses
      since inception and, even if demand from members exists, we cannot assure you
      that our business will be successful.




***The
      Company has a history of significant losses and may not be profitable in the
      future and has going concern considerations.***




Flagship
      has a history of net losses and has an accumulated deficit of
      $27,862, 082
      from
      inception (July 9, 2002) through March 31, 2007. This amount does not include
      losses of Flagship prior to the Share Exchange, as defined herein. Furthermore,
      developing the Company’s business strategy and expanding the Company’s services
      will require additional capital and other expenditures. Accordingly, if the
      Company is not able to increase its revenue, it may never achieve or sustain
      profitability. You should not rely on the results for any particular period
      as
      an indication of our future performance. It is possible that, in future periods,
      our results of operations may be below the expectations of public market
      analysts and investors. Fluctuations in our quarterly operating results or
      our
      inability to achieve or maintain profitability may cause volatility in the
      price
      of our common
      stock in the public market. In light of these factors, among others, our
      independent registered public accounting firm has stated that there is
      substantial doubt about our ability to continue as a going concern in their
      opinion dated March 28, 2007 on our audited financial statements. The financial
      statements do not include any adjustments that might result for the outcome
      of
      this uncertainty.




2




***The
      Company may be unable to fund future growth.***




The
      Company’s business strategy calls for expansion through an increase in sales of
      membership by its internal and external sales forces. To this end, the Company
      has decided to invest substantial funds to increase its sales and marketing
      resources in order to grow revenues. In order to implement this
      strategy, the
      Company will require funding for additional personnel, capital expenditures
      and
      other expenses, as well as for working capital purposes. Financing may not
      be
      available to the Company on favorable terms, if at all.
      If adequate funds are not available on acceptable terms, then the Company may
      not be able to meet its business objectives for expansion. This, in turn, could
      harm the Company’s business, results of operations and financial condition. In
      addition, if the Company raises additional funds through the issuance of equity
      or convertible debt securities, or a combination thereof, then the shareholders
      will suffer dilution, and any new securities may have
      rights, preferences and privileges senior to those of our common stock. .
      Furthermore, if the Company raises capital or acquires businesses by incurring
      indebtedness, the
      Company will become subject to the risks associated with indebtedness, including
      interest rate fluctuations and any financial or other covenants that the
      Company’s lender may require. Moreover, if the Company’s strategy to increase
      its sales and marketing resources in order to grow revenues does not produce
      the
      desired result, then the Company may incur significant,
      unrecoverable expenses.




***The
      Company’s growth*** ***may*** ***be limited if it is unable to attract and retain qualified
      personnel.***




The
      Company’s business is largely dependent on the skills, experience and
      performance of key members of the Company’s senior management team. The Company
      plans to increase its sales and marketing personnel, as well as enter into
      agreements with independent third parties to sell products and services in
      order
      to grow revenue. The Company believes that its success depends largely on its
      ability to attract and retain highly-skilled and qualified technical, managerial
      and marketing personnel and enter into agreements with third parties. The
      market for
      highly skilled engineering, sales, marketing and support personnel is highly
      competitive as a result of the limited availability of technically-qualified
      personnel with the requisite understanding of the markets which the Company serves. The inability to hire
      or
      retain qualified personnel may hinder
      the Company’s ability to implement its business strategy and may harm its
      business.




***Lengthy
      sales and implementation cycles for the Company’s product makes it difficult to
      forecast revenues and, as a result, may have an adverse impact on the Company’s
      business.***




The
      period from the Company’s initial contact with potential corporate buyers to the
      consummation of an agreement to offer the Company’s product to its employees is
      difficult to predict. These sales may be subject to delays due to a client’s
      internal procedures for approving such expenditures and other factors beyond
      the
      Company’s control. Implementation may be subject to delays based on the
      availability of the internal resources of the client that are needed, acceptance
      by potential members and other factors outside of the Company’s control. As a
      result, the Company has limited ability to forecast the timing of revenue from
      new members. This, in turn, makes it more difficult to predict the Company’s
      financial performance from quarter to quarter.




During
      the sales cycle and the implementation period, the Company may expend
      substantial time, effort and money preparing contract proposals and negotiating
      contracts without receiving any related revenue. In addition, many of the
      expenses related to providing the Company’s services are relatively fixed in the
      short term, including personnel costs, fixed overhead, and technology and
      infrastructure costs. As a result, the Company may be unable to adjust spending
      quickly enough to offset any unexpected revenue shortfall or delay, in which
      case the Company’s results of operations would suffer. In addition, in an
      attempt to enhance the Company’s long-term competitive position, the Company may
      from time to time make decisions regarding pricing, marketing, services and
      technology that could have a near-term adverse effect on the Company’s operating
      results.




***The
      Company faces significant competition for its products and
      services.***




The
      markets in which the Company operates are intensely competitive, continually
      evolving and, in some cases, subject to rapid change. The Company expects the
      intensity of competition and the pace of change either to be maintained or
      at
      least be increased in the future. Many of the Company’s potential competitors
      may have greater financial, technical, product development, marketing and other
      resources than the Company. These organizations may be better known than the
      Company and may have more customers or users than the Company does. The Company
      cannot provide assurance that the Company will be able to compete successfully
      against these organizations or any alliances they have formed or may
      form.




3




***If
      the Company is unable to provide priority access to high quality healthcare
      that
      attracts and retains members, the Company’s revenues will be
      reduced.***




Interest
      in the Company’s products and services is based upon the Company’s ability to
      provide members with referrals and priority access to the Company’s network
      physicians. Although the Company has been able to continue to maintain and
      expand this network, if the Company is unable to continue to do so for any
      reason, the value of a membership would diminish and membership interest in
      the
      Company products and services would be adversely affected. Similarly, the
      Company’s ability to maintain or increase the number of highly qualified
      physicians in its network is based upon the Company’s ability to provide the
      physicians with incentive to continue to participate in the network. We cannot
      assure you that the Company will be able to retain qualified physicians to
      provide referral and priority access to members. If the Company is unable to
      provide high quality physicians to its members, the quality of the Company’s
      products and services will be reduced.




***The
      Company is exposed to the general condition of the healthcare
      market.***




The
      Company’s business is subject to global economic conditions, and in particular,
      market conditions in the healthcare industry. The Company’s operations may be
      adversely affected by
      the
      continued declines
      in employee benefit spending by large corporations and small to medium sized
      businesses. If global economic conditions worsen, or a prolonged slowdown in
      providing such benefits exists, then the Company may experience adverse
      operating results.




***The
      Company’s products may not achieve acceptance in the
      marketplace.***




The
      Company intends to offer its membership based products and services to large
      corporations, small to medium sized businesses and individuals. The markets
      for
      these products are relatively new, unpredictable and rapidly evolving. Lack
      of
      acceptance in the marketplace for these new products and services could have
      a
      material adverse effect on the Company’s business, results of operations and
      financial condition.




**Risks
      Related to Our Stock Being Publicly Traded**




***We
      will incur increased costs as a result of being a publicly traded
      company.***




As
      a
      publicly traded company, we will incur legal, accounting and other expenses
      that
      we did not incur as a privately held company, including costs associated with
      the periodic reporting requirements applicable to a company whose securities
      are
      registered under the Securities Exchange Act of 1934, or the Exchange Act,
      recently adopted corporate governance requirements, including requirements
      under
      the Sarbanes-Oxley Act of 2002, and other rules implemented relatively recently
      by the SEC and The NASDAQ National Market. We expect these rules and regulations
      to substantially increase our legal and financial compliance costs and to make
      some activities more time-consuming and costly. We also expect that these rules
      and regulations will make it more difficult and more expensive for us to obtain
      directors and officers’ liability insurance.




***We
      do not intend to pay dividends on our common stock.***




We
      have
      never declared or paid any cash dividend on our common stock. We currently
      intend to retain any future earnings and do not expect to pay any dividends
      in
      the foreseeable future.




***Penny
      stock rules could make it hard to resell your shares.***




The
      Company’s common stock does not meet the listing requirements for any trading
      market other than the Pink Sheets. We have applied for a listing on the Over
      the
      Counter Bulletin Board (the “OTCBB”), however, OTCBB may not accept the
      application of the market maker to initiate quotations in our common stock.
      An
      investor may find it more difficult to dispose of shares or obtain accurate
      quotations as to the market value of our common stock. In addition, rules
      promulgated by the SEC impose various practice requirements on broker-dealers
      who sell securities that fail to meet certain criteria set forth in those rules
      to persons other than established customers and accredited investors.
      Consequently, the liquidity of the Company’s securities could be impaired, not
      only in the number of securities which could be bought and sold, but also
      through delays in the timing of transactions, reduction in security analysts'
      and the news media's coverage of the Company, and lower prices for the Company’s
      securities than might otherwise be attained.




4




***Future
      Sales By Our Stockholders May Negatively Affect Our Stock Price And Our Ability
      To Raise Funds In New Stock Offerings.***




Sales
      of
      our common stock in the
      public market could lower the market price of our common stock. Sales may also
      make it more difficult for us to sell equity securities or equity-related
      securities in the future at a time and price that our management deems
      acceptable or at all. Of the 59,096,607 shares
      of common
      stock outstanding
      as of May 1, 2007, 9,390,302 shares
      are freely tradable without restriction, unless held by our "affiliates". The
      remaining 49,706,305 shares
      of common
      stock, which
      are
      held by existing stockholders, including the officers and directors, are
      "restricted securities" and may be resold in the public market only if
      registered or pursuant to an exemption from registration. Some of these shares
      may be resold under Rule 144.




***Our
      Common Stock May Be Affected By Limited Trading Volume And May Fluctuate
      Significantly, Which May Affect Our Shareholders' Ability To Sell Shares Of
      Our
      Common*** ***Stock*** ***.***




Prior
      to
      this filing, there has been a limited public market for our common
      stock and
      there
      can be no assurance that a more active trading market for our common
      stock will
      develop. An absence of an active trading market could adversely affect our
      shareholders' ability to sell our common
      stock in
      short
      time periods, or possibly at all. Our common
      stock has
      experienced, and is likely to experience in the future, significant price and
      volume fluctuations, which could adversely affect the market price of our common
      stock without
      regard to our operating performance. In addition, we believe that factors such
      as quarterly fluctuations in our financial results and changes in the overall
      economy or the condition of the financial markets could cause the price of
      our common
      stock common stock to
      fluctuate substantially. These fluctuations may also cause short sellers to
      enter the market from time to time in the belief that we will have poor results
      in the future. We cannot predict the actions of market participants and,
      therefore, can offer no assurances that the market for our common stock will
      be
      stable or appreciate over time. The factors may negatively impact shareholders'
      ability to sell shares of our common stock.




***The
      Company may be subject to litigation.***




The
      Company may be subject to claims involving how the Company conducts its
      business. Any such claims against the Company may affect its business, results
      of operations and financial conditions. Such claims, including those without
      merit, could require the Company to pay damages or settlement amounts and would
      require a substantial amount of time and attention from the Company’s senior
      management as well as considerable legal expenses. Although the Company does
      not
      anticipate that its activities would warrant such claims, there can be no
      assurances that such claims will not be made.




***The
      Company lacks accounting and reporting controls.***




The
      Company’s Chief Financial Officer (the “CFO”) is solely responsible for the
      accounting and reporting functions for the Company and outsources certain of
      its
      accounting and finance functions to an independent third party. As a result,
      the
      Company currently has limited segregation of duties regarding the Company’s
      accounting and reporting functions. Management recognizes this limited
      segregation of duties as a deficiency in the Company’s internal controls and is
      planning to implement procedures to mitigate this deficiency.




5




***Government
      regulation of healthcare creates risks and challenges with respect to the
      Company’s compliance efforts and business strategies.***




The
      healthcare industry is highly regulated and is subject to changing political,
      legislative, regulatory and other influences. Existing and new Federal and
      state
      laws and regulations affecting the healthcare industry could create unexpected
      liabilities for the Company and cause the Company to incur additional costs
      and
      restrict the Company’s operations. Many healthcare laws are complex and their
      application to specific products and services may not be clear. In particular,
      many existing healthcare laws and regulations, when enacted, did not anticipate
      the healthcare products and services that the Company provides. However, these
      laws and regulations may nonetheless be applied to the Company’s products and
      services. As an international company, the Company may conduct business in
      a
      number of countries and thus may be subjected to local business practices,
      laws
      and regulations. The Company's increasing penetration into the Chinese market
      in
      particular is a significant risk to our business. Management’s failure to
      accurately anticipate the application of these laws and regulations, or other
      failures to comply, could create liability, result in adverse publicity and
      negatively affect our businesses. Some of the risks the Company faces from
      healthcare regulation are as follows:




*Anti-kickback
      Laws*




There
      are
      federal and state laws that govern patient referrals, physician financial
      relationships and inducements to healthcare providers and patients. The federal
      healthcare programs anti-kickback law prohibits any person or entity from
      offering, paying, soliciting or receiving anything of value, directly or
      indirectly, for the referral of patients covered by Medicare, Medicaid and
      other
      federal healthcare programs or the leasing, purchasing, ordering or arranging
      for or recommending the lease, purchase or order of any item, good, facility
      or
      service covered by these programs. Many states also have similar anti-kickback
      laws that are not necessarily limited to items or services for which payment
      is
      made by a federal healthcare program.




The
      laws
      in this area are broadly written and it is often difficult to determine
      precisely how the laws will be applied in specific circumstances. Penalties
      for
      violating the federal anti-kickback law include imprisonment, fines and
      exclusion from participating, directly or indirectly, in Medicare, Medicaid
      and
      other federal healthcare programs. Any determination by a state or federal
      regulatory agency that any of the Company’s practices violate any of these laws
      could subject the Company to civil or criminal penalties and require the Company
      to change or terminate some portions of its business and could have an adverse
      effect on the Company’s business. Even an unsuccessful challenge by regulatory
      authorities of the Company’s practices could result in adverse publicity and be
      costly for the Company to defend.




*Medical
      Professional Regulation*




The
      practice of most healthcare professions requires licensing under applicable
      state law. In addition, the laws in some states prohibit business entities
      from
      practicing medicine. If a state determines that some portion of the Company’s
      business violates these laws, it may seek to have the Company discontinue those
      portions or subject the Company to penalties or licensure requirements. Any
      determination that the Company is a healthcare provider and has acted improperly
      as a healthcare provider may result in liability to the Company.




***The
      Company faces potential liability related to the privacy and security of
      personal information it collects from consumer and healthcare professionals
      through its Web sites.***




Internet
      user privacy has become a major issue both in the United States and abroad.
      The
      Company has privacy policies posted on its website that the Company believes
      comply with applicable laws requiring notice to users about the Company’s
      information collection, use and disclosure practices. However, whether and
      how
      existing privacy and consumer protection laws in various jurisdictions apply
      to
      the Internet is still uncertain and may take years to resolve. Any legislation
      or regulation in the area of privacy of personal information could affect the
      way the Company operates its website and could harm its business. Further,
      the
      Company cannot assure you that the privacy policies and other statements on
      its
      website or its practices will be found sufficient to protect the Company from
      liability or adverse publicity relating to the privacy and security of personal
      information.




6




Under
      the
      Health Insurance Portability and Accountability Act of 1996, or HIPAA, Congress
      established a set of federal national privacy standards for the protection
      by
      health plans, healthcare clearinghouses, healthcare providers and their business
      associates of individually identifiable health records. While the Company’s
      members own and control their own personal health records, the Company’s
      maintenance of these records using Global Health ID TM may
      subject the Company to HIPAA regulations. Furthermore, legislation regarding
      HIPAA is evolving and often confusing as it applies to new businesses such
      as
      the Company. Violation of HIPAA could result in substantial penalties that
      could
      adversely affect the Company’s future.




**Additional
      Information**





We
      are
      obligated to file reports with the SEC pursuant to the Securities Exchange
      Act
      of 1934, as amended, (the “Exchange Act”). The public may read and copy any
      materials that we file with the SEC at the SEC’s Public Reference Room at 100 F
      Street, N.E., Washington, D.C. 20549. The public may obtain information on
      the
      operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
      The
      SEC maintains an Internet site that contains reports, proxy and information
      statements, and other information regarding issuers that file electronically
      with the SEC. We file electronically with the SEC. The address of that site
      is http://www.sec.gov .




7




**General
      Discussion on Results of Operations and Analysis of Financial
      Condition**




**Overview**





**Corporate
      History**





Flagship
      Global Health, Inc. (“Flagship”) was organized on February 5, 1993, and was
formerly
      known as Patients & Physicians, Inc., which commenced operations on July 9,
      2002.




On
      June
      27, 2006, Flagship closed an Exchange Agreement (the “Share Exchange”) with all
      of the stockholders of Flagship Patient Advocates, Inc. (“Advocates”) whereby
      Flagship acquired all of the issued and outstanding capital stock of Advocates.
      Upon completion of the Share Exchange, Advocates stockholders controlled
      approximately 99% of the then issued and outstanding common stock. Prior to
      the
      Share Exchange, Flagship was a shell company. Post the Share Exchange, Advocates
      business activities were the activities of Flagship. As a result of these
      factors, this transaction has been treated as a reverse merger and a capital
      transaction, equivalent to the issuance of stock by Advocates for Flagship’s net
      assets and, accordingly, the historical financial statements prior to June
      27,
      2006 are those of Advocates. All shares and per share data prior to the Share
      Exchange have been restated to reflect the stock issuances and the effect of
      the
      closing of the Share Exchange.





On
      January 12, 2007, a Certificate of Ownership and Merger was filed with the
      Secretary of State of the State of Delaware, pursuant to which Flagship merged
      with its wholly owned subsidiary, Advocates. As a result of the merger, Flagship
      assumed all the obligations of Advocates and the operations of Advocates were
      dissolved. As the surviving entity, Patients & Physicians, Inc. changed its
      name to Flagship Global Health, Inc. on January 12, 2007.





In
      connection with the Share Exchange, the stockholders of Advocates acquired
      the
      majority of the voting shares of Flagship, with Flagship carrying on the
      business of Advocates, and the officers and directors of Advocates became the
      officers and directors of Flagship. Therefore, the transaction is being
      accounted for as Advocates being the accounting acquirer (legal acquiree) and
      Flagship being the accounting acquiree (legal acquirer). Since at the closing
      Flagship was a non-operating shell corporation no longer meeting the definition
      of a business as defined in EITF Consensus 98-3, *Determining
      Whether a Nonmonetary Transaction Involves Receipt of Productive Assets or
      of a
      Business* ,
      the
      transaction is equivalent to Advocates issuing stock for the net liabilities
      of
      Flagship, accompanied by a recapitalization. The accounting will be identical
      to
      that resulting from a reverse acquisition, except that there will be no
      adjustments to the historic carrying values of the assets and liabilities.




Prior
      to
      the Share Exchange, Flagship was a shell company whose primary business
      objective was to merge with an operating entity.




Flagship
      is a membership-based, private medical group dedicated to obtaining the highest
      level of healthcare services for its members, whether they are at home or
      traveling. Acting as a member’s healthcare advocate, Flagship is focused on
      providing priority access to renowned and clinically acclaimed physicians,
      which
      are typically difficult to access. Rather than simply providing names, Flagship
      offers referrals, priority appointments, and personalized advocacy services
      to
      its members, all linked by a sophisticated and proprietary information
      management system. For Flagship, healthcare advocacy means bringing about the
      delivery of exceptional “medicine at the speed of need” to each of our members.
      The Company derives revenue from the sale of annual memberships to a combination
      of various service offerings.




8




**Critical
      Accounting Policies**




Refer
      to
      the Company’s audited financial statements for the year ended December 31, 2006
      included in our Form 10-KSB, filed with the SEC on April 2, 2007, for a summary
      of the Company’s significant accounting policies.




**Revenue
      Recognition**




We
      derive
      revenue from the sale of memberships to individuals and institutions for access
      to its healthcare service offerings.




We
      recognize revenues in accordance with Securities and Exchange Commission (the
      “SEC”) Staff Accounting Bulletin No. 101, *Revenue
      Recognition in Financial Statements* (“SAB
      No. 101”) as amended by SEC Staff Accounting Bulletin No. 104, *Revenue
      Recognition* ,
      revised
      and updated (“SAB No. 104”). SAB No. 104 stipulates that revenue generally is
      realized or realizable and earned, once persuasive evidence of an arrangement
      exists, delivery has occurred or services have been rendered, the fee is fixed
      or determinable and collectibility is reasonably assured. We sell memberships
      to
      individuals and institutions for access to its healthcare service offerings.
      The
      Company recognizes revenue ratably over the life of the membership.




To
      date,
      our memberships have been marketed only through its in-house sales force and
      a
      network of independent brokers.




In
      the
      broker channel, we recognize revenue when the broker distributor sells our
      memberships, provided we have satisfied all other terms and conditions.




**Stock-Based
      Compensation**




We
      have
      adopted Statement of Financial Accounting Standards (“SFAS”) No. 123(R) (revised
      2004), *Share-Based
      Payment* (“SFAS
      No. 123(R)”), which requires the recognition of compensation expense for
      employee stock options and other share-based payments. SFAS No. 123(R) was
      issued in December 2004. Under this method of adoption, expense related to
      employee stock options and other share-based payments is recognized over the
      relevant service period based on the fair value of each stock option
      grant.




We
      have
      accounted for non-employee compensation expense in accordance with Emerging
      Issues Task Force (“EITF”) Issue No. 96-18, *Accounting
      for Equity Instruments That Are Issued to Other Than Employees for Acquiring,
      or
      in Conjunction with Selling, Goods or Services* (“EITF
      96-18”), which requires non-employee stock options to be measured at their fair
      value as of the earlier of the date at which a commitment for performance to
      earn the equity instruments is reached (“performance commitment date”) or the
      date at which performance is complete (“performance completion date”).
      Accounting for non-employee stock options, which involve only performance
      conditions when no performance commitment date or performance completion date
      has occurred as of the interim financial reporting date, requires measurement
      at
      the instruments then-current fair value.




We
      have
      followed the guidance outlined in Financial Accounting Standards Board (“FASB”)
      Interpretations (“FIN”) No. 28, *Accounting
      for Stock Appreciation Rights and Other Variable Stock Option or Award
      Plans* (“FIN
      28”), as it relates to computing expense when appreciation rights vest over
      time. As of September 30, 2006, we accounted for 2,355,000 options under the
      guidance of EITF 96-18.




The
      fair
      value of each stock option grant to employees is estimated on the date of grant.
      The fair value of each stock option grant to non-employees is estimated on
      the
      applicable performance commitment date, performance completion date, or interim
      financial reporting date.




**Results
      Of Operations For The Three Months Ended March 31, 2007 Compared To The Three
      Months Ended March 31, 2006**





Our
      activities to date have been focused on developing a membership-based specialty
      healthcare advocacy company providing physician referrals, on a priority basis,
      and emergent care needs to its members, all linked by a sophisticated management
      system and is still a development stage company. Our operating activities to
      date have consisted primarily of developing our membership and physician
      databases and establishing our physician network. We had revenues of $50,902
      and
      total net costs and expenses of $3,299,504
      for the three months ended March 31, 2007 compared to revenues of $7,014 and
      total net costs and expenses of $3,040,289 for the three months ended March
      31,
      2006.




9




**Revenues**





Our
      total
      revenue increased to $50,902 for the three months ended March 31, 2007 versus
      $7,014 for the three months ended March 31, 2006. The increase is a result
      of
      sales of memberships which began in late 2005. We are still in the stages of
      early product and services development and we do not expect to generate
      significant revenue from our various product lines until the second half of
      2007.





**Costs
      of Revenue**





Our
      total
      costs of revenue increased to $7,275 for the three months ended March 31, 2007
      versus $2,199 for the three months ended March 31, 2006. The increase is
      directly related to costs associated with membership sales which began in late
      2005.




10


**Total
      Expenses**





Total
      operating expenses for the three months ended March 31, 2007 were $2,306,376
      compared to $2,284,287 for the three months ended March 31, 2006, an increase
      of $22,089
      or approximately
      1.0%. These expenses incurred during the three months ended March 31, 2007
      and
      2006 are set forth below in further detail.





Membership
      services expenses. Membership services expenses increased by $32,857
      or 5.1% to $ 674,818
      for the three months ended March 31, 2007 versus $641,961 for the three months
      ended March 31, 2006. This change was primarily due to an increase of $128,632
      attributable to the amortization of stock options, offset by a decrease of
      $70,256 in salaries due to a reduction in personnel and a reduction of $23,423
      in stipends paid to Chiefs and Regional Medical Directors.





Selling,
      general and administrative expenses. Selling, general and administrative
      expenses decreased by $10,768 to $1,631,558 for the three months ended March
      31,
      2007 as compared to $1,642,326 for the three months ended March 31, 2006. This
      change is a decrease of $45,706 in salaries and related costs due to a reduction
      in personnel and $473,070 attributable to the amortization of stock options.
      These decreases were offset by increases of $203,325 in rent expense related
      to
      the move to new headquarters, $236,798 in legal and professional expenses
      related to being a public company, $31,258 in travel and entertainment related
      to business development, $25,982 related to the change in the company’s name and
      $15,386 related to investor relations.





Interest
      income. Interest income decreased by $2,728 to $8,836 for the three months
      ended
      March 31, 2007 as compared to $11,564 for the three months ended March 31,
      2006.
      This increase was a result of having less cash on hand during the current three
      months ended March 31, 2007 versus the three month period ended March 31,
      2006.





Amortization
      of debt discounts and debt issuance costs. Amortization of debt discounts and
      debt issuance costs increased to $832,137 for the three months ended March
      31,
      2007 versus $664,914 for the three months ended March 31, 2007. This increase
      was due to the amortization of the discounts on the Convertible Note financing
      that closed in late January 2006 over three months in 2007 versus approximately
      two months in 2006. The costs allocated to the debt are charged to operations
      over the life of the debt using the interest method, which produces a constant
      periodic rate of return.





Interest
      expense. Interest expense increased to $246,677 for the three months ended
      March
      31, 2007 versus $97,428 for the three months ended March 31, 2006. This increase
      is due to interest expense incurred in the current period related to the
      Convertible Notes for three months in 2007 versus two months for the in 2006
      and
      interest associated with the Apollo Notes for three months in 2007 and none
      in
      2006 since the Apollo Notes were not issued until the second
      quarter.





Other
      income and expenses. Other income and expenses increased to $76,850 for the
      three months ended March 31, 2007 versus ($5,224) for the three months ended
      March 31, 2006. The increase is due to the Company subletting certain vacated
      office space in late 2006 and receiving rental income from subletting the
      space.





**Net
      loss**





As
      a
      result of the foregoing, for the three months ended March 31, 2007 the net
      loss
      increased by $220,403
      or 7.3%, to a net loss of $3,255,877 compared
      to a net loss of $3,035,474 for the corresponding period in 2006.





**Liquidity
      and Capital Resources**




Our
      accompanying unaudited condensed financial statements have been prepared
      assuming we will continue as a going concern. We have experienced net losses
      from operations of $27,862,082 since inception (July 9, 2002), including
      $3,255,877 and $3,035,474 for the three months ended March 31, 2007 and 2006,
      respectively. In addition, we had a working capital deficit of $7,107,517 at
      March 31, 2007. These factors, among others, raise substantial doubt about
      our
      ability to continue as a going concern. Our unaudited condensed financial
      statements do not include any adjustment that might result from the outcome
      of
      this uncertainty. Assurances cannot be given that adequate financing can be
      obtained to meet our capital needs. Our continuation as a going concern is
      dependent upon our ability to generate sufficient cash flow to meet our
      obligations on a timely basis, to obtain additional financing and, ultimately,
      to attain profitability. Should any of these events not occur, we will be
      adversely affected and we may have to cease operations.




11




At
      March
      31, 2007 the Company had a working capital deficit of $7,107,518 compared to
      a
      working capital deficit of $5,072,906 at December 31, 2006. The increase in
      the
      deficit at March 31, 2007 is primarily attributable to an increase in the
      current portion of the Secured Convertible Term Notes issued in January 2006
      totaling $1,017,292, an increase in accounts payable and accrued liabilities
      of
      $340,947 and a decrease in cash to fund operations of $649,425.




During
      the three months ended March 31, 2007 we used a total of $1,756,566 in operating
      activities. The use of cash in 2007 was a result of the Company’s incurring
      operating expenses with minimal income from membership revenues.




During
      the three months ended March 31, 2007 cash generated from financing activities
      decreased by $2,474,183 to $1,130,000 as compared to $3,604,183 for the three
      months ended March 31, 2006. In 2006 the Company received proceeds of $1,130,000
      from a bridge financing as compared to $4,181,400 received in the three months
      ended March 31, 2006 relating to the Convertible Note Financing which closed
      in
      January 2006 offset by the repayment of $240,000 of certain notes and the
      purchase of the shell company for $240,000.




As
      of
      March 31, 2007 we had restricted cash of $824,117 which was used to secure
      certain obligations under our lease agreement for our principal offices located
      in New York, NY.





**Item
      3. Controls and Procedures.**




**A.
      Evaluation of Disclosure Controls and Procedures:**





Our
      disclosure controls and procedures are designed to ensure that material
      information relating to the Company are made known by others within the Company
      to our Chief Executive Officer (“CEO”), CFO and others in the Company involved
      in the preparation of our annual report and our quarterly reports. The Company
      has evaluated, with the participation of the Company’s CEO and CFO, the
      effectiveness of the design and operation of the Company’s disclosure controls
      and procedures as of March 31, 2007, pursuant to Exchange Act Rule 15d-15 and
      were determined not to be effective. Based upon that evaluation, the CEO and
      CFO
      identified deficiencies that existed in the design or operation of our internal
      control over financial reporting that it considered to be "material weaknesses."
      The Public Company Accounting Oversight Board defined a material weakness as
      a
      "significant deficiency or combination of significant deficiencies that results
      in more than a remote likelihood that a material misstatement of the annual
      or
      interim financial statements will not be prevented or detected."





The
      material weakness identified relate to:





·
            the
                lack of sufficient knowledge and experience among the internal accounting
                personnel regarding the application of US GAAP and SEC requirements;
                and




·
            insufficient
                written policies and procedures for accounting and financial reporting
                with respect to the current requirements and application of US GAAP
                and
                SEC disclosure requirements.




Notwithstanding
      the existence of this material weakness in our internal control over financial
      reporting, our management believes, including our Chief Executive Officer and
      Chief Financial Officer that the condensed consolidated financial statements
      included in this report fairly present in all material respects our financial
      condition, results of operations and cash flows for the periods presented.





12




**B.
      Changes in Internal Control over Financial Reporting:**





There
      were no changes in our internal controls over financial reporting identified
      in
      connection with our evaluation of these controls during the period covered
      by
      this report that could have significantly affected those controls subsequent
      to
      the date of the evaluation referred to in the previous paragraph, including
      any
      correction action with regard to significant deficiencies and material
      weaknesses.




13


**PART
      II**


**OTHER
      INFORMATION**





**Item
      1. Legal Proceedings.**





A
      former
      independent contractor (the “Plaintiff”) has filed a lawsuit against the
      Company, among others. The Plaintiff alleges that he was promised employment
      with Flagship and performed services for Flagship based on these promises.
      The
      Plaintiff is seeking compensatory and punitive damages, including the issuance
      of additional shares of stock for these services and attorney fees in an
      aggregate amount of approximately $1,800,000. The Company believes this lawsuit
      is without merit and intends to defend it vigorously. In management’s opinion
      the final resolution of this matter will not have material impact on the
      consolidated financial position or results of operations of the
      Company.





**Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds.**





In
      January 2007, the Company sold 565,000 shares of its common stock and issued
      282,500 warrants to purchase common stock at $2.00 per unit for an aggregate
      of
      $1,130,000. The warrants have a term of seven years and an exercise price of
      $1.00 per share.




The
      foregoing shares were issued pursuant to exemption from registration under
      Section 4(2) of the Securities Act of 1933.





**Item
      3. Defaults Upon Senior Securities.**





None.





**Item
      4. Submission of Matters to a Vote of Security Holders.**





None.




**Item
      5. Other Information.**





None.





**Item
      6. Exhibits.**


ExhibitNumber
              
              Description
                  of Document31.1
              
              Rule
                  13a-14(a)/15d-14(a) Certification (CEO)**31.2
              
              Rule
                  13a-14(a)/15d-14(a) Certification (CFO)**32.1
              
              Section
                  1350 Certification (CEO)**32.2
              
              Section
                  1350 Certification (CFO)**







**
      Filed
      herewith.




14


**SIGNATURES**





In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.




**FLAGSHIP
              GLOBAL HEALTH, INC.**Date:
              May 15, 2007
            By:
            /s/
              Fred
              F. NazemFred
              F. Nazem, Chief Executive Officer and
              Chariman


Date:
                May 15, 2007
              By:
              /s/
                Philip E. BarakPhilip
                  E. Barak, Chief Financial Officer
  15